Parmalat to Pursue Parts of Lawsuit

Published: August 10, 2005

A federal judge has allowed the Italian dairy company Parmalat to proceed with its $10 billion lawsuit against Bank of America, but dismissed most of its claims.

Judge Lewis A. Kaplan of Federal District Court in Manhattan granted Bank of America's motion to dismiss 10 of 12 claims, and parts of the two others. He gave Parmalat permission to replead two of the dismissed claims.

Parmalat's administrator, Enrico Bondi, has sued Bank of America and Citigroup and the former Parmalat auditors Deloitte & Touche and Grant Thornton International.

Parmalat contends Bank of America helped devise several, mostly off-balance-sheet transactions that were ''deliberately designed to conceal Parmalat's insolvency.'' Mr. Bondi said the bank collected fees it did not deserve by making Parmalat appear healthier than it was.

In his Friday ruling, Judge Kaplan threw out claims against Bank of America including fraud, negligence and theft of corporate assets. He let stand claims of breach of fiduciary duty and conspiracy. He will let Mr. Bondi replead racketeering claims.

A Bank of America spokeswoman, Rhiannedd Brooke, said the bank welcomed the decision and would defend itself vigorously against the remaining claims. She said the bank had more than $462 million of financial exposure to Parmalat.

Known for its long-life milk, Parmalat filed for insolvency in December 2003, burdened by about 14 billion euros ($17.3 billion) of debt, after learning of a 4 billion euro hole in its accounts.

Judge Kaplan ruled in July that Mr. Bondi could proceed with his lawsuits against the two auditors. In April, a New Jersey state appeals court allowed Mr. Bondi's lawsuit against Citigroup to continue.